A few ideas I considered when decorating my small apartment.
A) Furniture that multi-tasks. I have a couch, that has storage underneath and converts to a bed (jack-knife couch), Ottomans that have storage inside of them.
B) Use wall space where possible to reduce counter clutter (magnetic strip on wall to hold knives, in cabinet spice racks).
C) Revise what you own (ask yourself if you really need something, and if you don't then give it away)

Some ideas:
http://www.amazon.com/Norpro-Inch-Magnetic-Knife-Tool/dp/B000CRDDBE/ref=sr_1_2?s=home-garden&ie=UTF8&qid=1303157863&sr=1-2

http://www.amazon.com/Door-Mounted-Cabinet-Spice-Rack-21-1/dp/B001ENZG4M

Re: design for small spaces should be treated like packing a suitcase. Decide what you need/want and then remove half. Monochromatic colors with interesting pops of color. Nothing heavy to the eye. Remove "clutter" and search for conversation objects ie vases, small sculptures, textural objects that give you joy.

Built-ins, re-cycling, customizing and double duty. I have a nook my bed fit into. My bed also doubles as a sofa. I made higher leg post so my old twin bed can slide under the new queen to function as a multi level sofa and an instant very comfortable guest bed. I also built an armrest and back and mounted it to the wall around the bed. The back hides some of the seat so you don't have to crawl onto the sofa but can sit down comfortably and for sleeping the queen pulls out from under the back so I can use the entire bed. Also the back flips up so I can hide the bedding in it. Most functional furniture I have ever had.

@ploefff I would really like to see an image of that

Great post!

1. Make sure your storage is stackable, and can double as a display table.

2. Make sure that storage is also attractive - metal and glass, not plastic.

3. Install a ton of hooks.

4. Look around the house for spare stuff that can also be used in an emergency: coats, flashlights, tools, etc. Put them in buckets, and store them in the trunk of your car.

Organization and storage! This is the key to living in a small space. Only keep what you actually use. Give everything an assigned spot in your home and keep those items there. It's so much easier living in a small space when you know where things are, and when items are out of sight. Might I add that it's much easier to clean when you live with less!

I agree with the above comment - organization and storage are the key. Everything else should be functional and pleasing to the eye. Small spaces don't have room for uncomfortable couches or useless items. "Clutter" is not bad if it's artistically organized, useful, and reflects the owner's style. And finally - lighting is important -bring in as much natural light as possible!

Try not to move every year.

I know what some will argue: moving helps you edit. While that's true, I think it's common to make a purchase that solves a problem in your current apartment, but that purchase may be obsolete in your next space.

-- In college, I needed the smallest dresser I could find to wedge into a corner, but now the child's dresser I bought is annoyingly tiny on a more ample wall.

-- Three apartments ago, I needed a blackout shade because a bright street lamp was located directly outside my window; it's been in storage ever since I moved out.

-- In my last apartment, my room was so narrow that I needed a bookshelf headboard because a bedside table wouldn't fit and I couldn't drill shelves into the wall, but my current room is nicely proportioned and now I wish I had side tables instead.

The more you move, the more you'll buy (or invest time DIYing) to fix the quirks of your new space.

Don't buy new things but reconsider the possibilities of the stuff you already own. You'll be surprised to see what a vase can do, besides holding flowers. Or those superfluous chairs.

As many have already said, have items that can do double-duty. Sofabed, storage ottomans, underbed storage...

Be creative in your storage solutions. Instead of having a box spring/mattress combo, switch to a platform bed with just the mattress - box springs don't always fit up and down stairs very easily anyway, and platforms can normally breakdown.

If you entertain, try to use things that can break down and store or tuck into a corner. TV tray tables make good laptop stands or a place to spread out with homework or paperwork. Folding chairs, as always, store quickly and easily - they don't always have to be the gross steel ones either.

Keep things organized! If you haven't looked at something for 15 months (that will cover two seasons being from MN, the general 6 month rule doesn't work since a lot of items are seasonal), get rid of it. Throw it out, sell it, but get rid of it, as it is of no use to you. Someone else may be able to use whatever it is you're tossing.

Smart spending. Less space = less items = more quality for the same cost. Plus high end items are generally more durable. Buy large pieces in classic styles and accent with smaller, cheaper items so when you get tired of them you won't feel so bad donating and buying new ones.

Also, design wise, GO BOLD. A tiny space with no color or personality is very "college dorm." No, thank you! All white doesn't make a place look bigger, just sterile.

Beds with storage in the foundation. It's amazing how much stuff you can fit in there. I use one from IKEA. I could probably hide like 10 bodies in it with ZERO chopping: http://www.ikea.com/us/en/catalog/products/10098893

...I'M KIDDING! GOD! 9 bodies tops. Anyway... shelving all along the walls about 15 to 20 inches from the ceiling- if you have 12'+ ceilings.

Also, side note- don't store bodies in the IKEA bed foundation overnight. If you need to store them, consider this 72 cubic foot stainless steel freezer from True: http://bit.ly/e14X7S. It's at a really good price right now.

WHAT?! I'M KIDDING! (about the bodies; not the sale)

- Have some big pieces instead a lot of small ones. Sounds crazy, but big pieces will make it look less like a miniature apartment and will help to make the place look bigger. A large painting or large carpet are a good example. Make big gestures!
- Edit a lot; you probably have to go through your stuff ten times more a year then someone with a large place. So yes; storage and organisation is the key.
- Keep it down; not to many crazy patterns everywhere. Solid colors on the walls and couch/bedding; makes the place look bigger then it is, really!
- If you want an accent wall, paint the one that elongates the place in the right direction. Usually this is the shortest wall.
- Go vertical: ceiling to floor curtains, even if your window's are not that big. This will make your place look way bigger than 'cutting' the wall in 'sections', making it look smaller and more fragmented.
- Same for bookcases; Think about bookcases more as (continued) walls, invest in a good, unified system like Ikea's IVAR (paint it!). It is very flexible and you'll be able to tailor it to your needs.
- The 60-30-10 rule works well for colors; too many colors/patterns/items will make the place look crammed.

When it comes to small places, Less is more, more or less (:

Agree with akay, don't move every year.
I moved to a larger apartment and you would think my furnitures would fit. Nope. Different floor plans made some of my large pieces (that I've only owned for a year) look awkward due to unproportioned scale. I'm seriously debating myself if I should replace them when there is nothing wrong with them, they're solid and on the higher end.

As for strategy/design tip, my advice is to try to expose the floor as much as possible so get furnitures with legs; pedestal table seems ideal because it only has 1 leg. I paid extra $$$ to get my TV professional wall mounted and the wires threaded behind the wall and into a closet where the dvd player, cable box, IR receiver, wi-fi, and landline phone (for emergency) are hidden. This way I don't need a media console and it free up floor space and therefore exposing the floors and making my space appear bigger.

Also, don't be afraid to remove built-in items. In my closet I removed one of the built-in shelves and slide my narrow book case into the nook and ta-da, 3 more shelves instead of just one.

I agree 50000% with Zenezie on showing the floor and using furniture on legs to accomplish that.